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Tuesday, May 24, 2011

A Rose By Any Other Name Would Smell As Sweet - Lean vs Operational Excellence

"A rose by any other name would smell as sweet" is a quote from Shakespeare's Romeo and Juliet which means what matters is what something is, not what it is called.  A recent article got me thinking about this and the waste of needing to go beyond Lean to "Operational Excellence".

Kevin Duggan, President of Duggan Associates, released his insights into the 2012 business forecast for Operational Excellence.
International lean expert Kevin Duggan of Duggan Associates predicts CEOs and executives will lead the transformation beyond lean to operational excellence to drive business growth; U.S. workforces of the future will be more self-sufficient and customer-centric.
He explains:
“Lean as a way of thinking and acting in business operations has been around for over 40 years. At its very core, the goal of lean is to maximize customer value while minimizing waste." 
But he says there's a relatively new business tool on the block based on Lean that’s designed to help a company grow called "Operational Excellence". According to Institute for Operational Excellence, the definition of Operational Excellence is: 
“When each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.”
So what is different according to Duggan:
Unlike lean which teaches how to create flow at the rate of customer demand through the use of value streams, operational excellence teaches what to do when value streams break down. It creates “self-healing” value streams that don’t rely on management, thereby enabling management to spend time growing the business.

"Operational excellence allows for this by letting flow determine what the workforce should do and when to do it. Standard work would tell the employee how to 'heal' that flow when it breaks down without management."

 "Operational excellence redirects management from looking inside, managing the activities of a workforce to looking outside, performing activities that will grow the business. We call that 'working on offense."

Isn't that Lean Thinking? Who doesn't want to grow their business?  For me Lean is a thinking methodology for running your business.  The of goal of which is to grow the business by adding value to the customer, being efficient by eliminating waste, and engaging all employees in this process.  Lean is about learning to seeing opportunities and continually improving them.  To me a value stream that breaks down is just another opportunity needing a countermeasure.  By engaging, empowering, and educating those in the value stream to do this management is free to work on growing the business.  Management should be thinking strategically not tactfully like many in the value stream will.  

"Operational Excellence" sounds like a way for a consultant to differentiate themselves from other Lean consultants. I think those that place arbitrary limits on Lean thinking don't fully understand the power of Lean. The point of the journey to true north is that it is never ending since the premise of continuous improvement is just that. Instead of changing the name or creating another level which is wasteful why not focus of the customer.    

What do you think of this?  Is "Operational Excellence" the new Lean? I'd like to hear your thoughts.

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  1. Tim, I fully agree with your assessment.

  2. Tim - I think you're exactly right. It's a distinction without a difference created solely as a marketing gimmick.

  3. Tim,

    You are right on the mark. I came across something like this last year and wrote a similar piece: http://piadvice.wordpress.com/2010/01/25/beyond-lean-%E2%80%93-to-where/


  4. At many places I've seen "lean" has a negative connotation (running with less people). Though I know this is not the true definition - it's a difficult hurdle to overcome. Though we (KCOE) uses "Operational Excellence" there are companies such as Bombardier or Rotax using our system but calling it something else.

    In some cases - Operational Excellence may have a negative connotation because of a failed attempt at an implementation.

    I don't think any consultant/coaching/blogger/etc disagrees with what destination/end state looks like (true north). I believe the pathway is more important than the definition or the word describing the end state. Whether we call it "lean" or "operational excellence" or "organizational excellence" or "healthcare excellence" or any other word for that matter, it's about the journey, no the destination (using the assumption that different words essentially have the same definition.

    In your name - "Lean Journey" I think you're spot on when saying "The Quest for True North."

    Warm Regards,

  5. Do you think that changing what we call "Lean" dilutes the methodology and thinking? I often hear that it is hard to understand the real principles and rules since everyone puts a new spin on it. This possibly makes it harder for it to adopted readily by all organizations.